9
O P I N I O N
M&A
An attractive seller
O ver the past few years, the AEC industry has become a highly acquisitive one. For owners looking to sell their business, it can be hard to know what exactly prospective buyers find attractive and unattractive. So how do we set ourselves apart from the pack and stand out as an enticing investment? Sound management, market verticals, and company culture – what buyers are looking for within the AEC industry.
right now seems to be growing and selling at high multiples, but energy service firms not so much.” 3)Understand the buyer’s culture and strategy. The AEC space is highly acquisitive. In that type of environment, a buyer has to state their strategy, in simple terms, and focus only on firms that fit their culture. Ryan Thorpe, from RTC Partners, says, “When a buyer doesn’t do this, their people don’t work well together, culture withers, and productivity “In my work as an M&A consultant with Zweig Group, I’ve seen countless owners struggle to pin down what will make their business valuable to potential buyers.”
Noah Hunt
In my work as an M&A consultant with Zweig Group, I’ve seen countless owners struggle to pin down what will make their business valuable to potential buyers. Through research, experience, and interviewing experts in the industry, here are a few universal value drivers I’ve found: 1)Management. David Ettenger, from Bow River Capital, a private equity firm focused on investing in the lower middle market, says, “Management is key. Bow River likes to truly partner with management, aligned both financially and strategically. With the AEC industry being a service-based business, so many of the relationships lie with management. We find a strong team helps provide a core for growth.” 2)Market verticals. A great end market is something buyers also consider. “If we get the market vertical right, a lot of the risk factors go out the window,” Ettenger says. “For example, anything healthcare
See NOAH HUNT, page 12
THE ZWEIG LETTER July 30, 2018, ISSUE 1258
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